On Aug. 22, 2012, Attorney Rock Pledl filed a lawsuit on behalf of 26 individuals with disabilities in the United State District Court for the Western District of Wisconsin against the Wisconsin Department of Health Services (DHS), DHS Secretary Dennis Smith, and three managed care organizations (MCOs) in the Family Care program -  Care Wisconsin, Community Health Partnership, and Northern Bridges.

The legal complaint (PDF) details drastic cuts that were made in the payment rates for residential services, forcing housing providers to make discharge notices to the guardians of people with developmental disabilities. 

The plaintiffs are currently being served in homes operated by larger corporate providers and in smaller owner-occupied homes.  The suit alleges that payment reductions made by the MCOs were coordinated with DHS and that, as a result, the residential providers can no longer safely maintain these individuals in their community. 

In one case, the payment rate for a 44 year-old man with behavioral challenges was reduced by Community Health Partnership (CHP) from $177.51 a day in 2008 to $56.66 a day in June 2012.  In another case, the daily rate for a 34 year-old non-ambulatory man who is 100 percent dependent on group home staff for all personal hygiene and other care was reduced by Northern Bridges (NB) from $284.70 to $112.00 in August 2012.

The day programs of at least two of the plaintiffs are also being affected by the rate cuts. One individual was forced by CHP to give up one day of programming at RFW in Action member St. Croix Industries so that she could live in a home operated by Paradigm Services.  Another plaintiff who is served by RFW in Action member Diversified Services in a supported employment enclave, is uncertain about whether she will be able to keep her job after the owner-occupied adult family home gave notice to NB that she could no longer be served at the lower payment rate.

The complaint asks the court for a “permanent injunction directing all of the defendants to: (1) restore the rates paid to residential providers who serve the plaintiffs and the proposed class members to the rates in effect on January 1, 2012, and (2) maintain residential provider rates at the January 1, 2012 level until the defendants develop an accurate method of setting residential provider rates that does not discriminate against individuals with developmental disabilities.”